Correlation Between Northern Lights and ClearBridge Large
Can any of the company-specific risk be diversified away by investing in both Northern Lights and ClearBridge Large at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Northern Lights and ClearBridge Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and ClearBridge Large Cap, you can compare the effects of market volatilities on Northern Lights and ClearBridge Large and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Northern Lights with a short position of ClearBridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and ClearBridge Large.
Diversification Opportunities for Northern Lights and ClearBridge Large
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northern and ClearBridge is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and ClearBridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Large Cap and Northern Lights is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Northern Lights are associated (or correlated) with ClearBridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearBridge Large Cap has no effect on the direction of Northern Lights i.e., Northern Lights and ClearBridge Large go up and down completely randomly.
Pair Corralation between Northern Lights and ClearBridge Large
Given the investment horizon of 90 days Northern Lights is expected to generate 5.26 times less return on investment than ClearBridge Large. But when comparing it to its historical volatility, Northern Lights is 1.6 times less risky than ClearBridge Large. It trades about 0.02 of its potential returns per unit of risk. ClearBridge Large Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,940 in ClearBridge Large Cap on September 3, 2025 and sell it today you would earn a total of 301.50 from holding ClearBridge Large Cap or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Lights vs. ClearBridge Large Cap
Performance |
| Timeline |
| Northern Lights |
| ClearBridge Large Cap |
Northern Lights and ClearBridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and ClearBridge Large
The main advantage of trading using opposite Northern Lights and ClearBridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights position performs unexpectedly, ClearBridge Large can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ClearBridge Large will offset losses from the drop in ClearBridge Large's long position.| Northern Lights vs. Vanguard Growth Index | Northern Lights vs. iShares Russell 1000 | Northern Lights vs. SPDR Portfolio SP | Northern Lights vs. Vanguard Mega Cap |
| ClearBridge Large vs. FT Vest Equity | ClearBridge Large vs. Northern Lights | ClearBridge Large vs. Diamond Hill Funds | ClearBridge Large vs. Dimensional International High |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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